In this article we discuss the 5 best beauty stocks to invest in. If you want to read our detailed analysis of these stocks, go directly to the 10 Best Beauty Stocks to Invest In.
5. Unilever PLC (NYSE: UL)
Market Capitalization: $155 billion
Number of Hedge Fund Holders: 20
Unilever PLC (NYSE: UL) is fourth on our list of the best beauty stocks to invest in. It is a London-based consumer goods company, dealing in products related to food, home care, and beauty. The company has over 400 brands with operations in 190 countries worldwide. Unilever PLC (NYSE: UL) is the parent company of Ben & Jerry’s, Dermalogica, Volition Beauty, Shea Moisture, etc.
In 2020, Unilever PLC (NYSE: UL) generated over 50 billion euros in revenue and has reported a 5.7% growth in sales in Q1 2021. The sales of the skin cleansing products rose by 5% and personal care, especially deodorants saw a growth of 8% in sales. The UL stock price has grown by over 4% in the past year. The company has also announced a quarterly dividend of 0.42 euros per share. Unilever PLC (NYSE: UL) is also making an effort to achieve carbon neutrality by 2039 by shifting toward renewable energy resources, a move supported by the majority of shareholders.
Earlier in April, Unilever PLC (NYSE: UL) announced to acquire the Texas-based lifestyle company, Onnit, to contribute to the health and well-being of the consumers. At the end of Q1 2021, 20 hedge funds, tracked in our database have stakes in Unilever PLC (NYSE: UL), worth $826 million.
Lindsell Train, an investment management firm, released its Q4 2020 investor letter and mentioned Unilever PLC (NYSE: UL) in it. Here is what the firm has to say:
“One of the biggest holdings here includes Unilever. The way consumers have flocked to such brands in 2020, perhaps for reassurance, has been reassuring for the investors.
In Unilever’s most recent quarterly results the company reported its e-commerce revenues were up 76% year-on-year, up to 10% of the total. This does not mean that Unilever is turning into an Internet business, but it does give reassurance that its brands – from Ben & Jerry’s to Domestos – can remain relevant in an increasingly digital world. By the way – have you tried Unilever’s new Marmite-infused peanut butter? It’s divine.”
4. Coty Inc. (NYSE: COTY)
Market Capitalization: $7.2 billion
Number of Hedge Fund Holders: 25
Coty Inc. (NYSE: COTY) is a New York-based beauty company that mainly deals in hair, makeup, skin, and nail products. The company also manufactures and distributes fragrances. Coty Inc. (NYSE: COTY) is the parent company of some widely acclaimed beauty brands, including Wella, Rimmel, Clairol, Covergirl, Philosophy, and the most popular amongst Gen Z, Kylie Cosmetics. It ranks sixth on our list of the best beauty stocks to invest in.
Coty Inc. (NYSE: COTY) generated a revenue of over $1 billion in Q3 FY21. Over 54% of the revenue came from the U.S. and the Asia Pacific, especially China. Earlier in June, Evercore ISI stated that Coty Inc. (NYSE: COTY) has a potential upside of 70% to the company because of Covergirl’s market share growth. Moreover, the COTY stock has shown solid performance, gaining by 120% in the past year and 41% year to date.
At the end of Q1 2021, 25 hedge funds tracked in our database have positions in Coty Inc. (NYSE: COTY), up from 22 in the previous quarter. The total value of these stakes is $262 million.
3. Ulta Beauty, Inc. (NASDAQ: ULTA)
Market Capitalization: $18.9 billion
Number of Hedge Fund Holders: 46
Ulta Beauty, Inc. (NASDAQ: ULTA) is a chain of beauty stores and one of the largest beauty retailers in America. The company deals with beauty products, including skin, hair, fragrances, and also offer salon services to its customers. Ulta Beauty, Inc. (NASDAQ: ULTA) ranks third on our list of the best beauty stocks to invest in.
In Q1 2021, Ulta Beauty, Inc. (NSDAQ: ULTA) generated over $1.9 billion in revenue, up from $1.1 billion during the same period last year. The EPS for the quarter stood at $4.1, beating the market estimate of $1.95. The ULTA stock has also shown solid performance in the past year, after seeing a low of $148 in March 2020. The stock price has gained over 72% in the past year and 22.3% year to date.
Ulta Beauty, Inc. (NASDAQ: ULTA) remained the top choice of JPMorgan in consumer stocks. Earlier in May, the bank raised the price target on ULTA stock to $379, rating it as ‘Overweight’. Of 866 hedge funds tracked by Insider Monkey, 46 funds have positions in Ulta Beauty, Inc. (NASDAQ: ULTA) in Q1 2021, up from 43 in the previous quarter.
2. International Flavors & Fragrances Inc. (NYSE: IFF)
Market Capitalization: $36.9 billion
Number of Hedge Fund Holders: 55
International Flavors & Fragrances Inc. (NYSE: IFF) is an American corporation that manufactures and sells natural ingredients for flavors, scents, and beauty products. The company has operations in over 44 countries. International Flavors & Fragrances Inc. (NYSE: IFF) is the parent company of some of the famous brands, including Frutarom, Tastepoint Inc, Danisco BV, etc.
In Q1 2021, International Flavors & Fragrances Inc. (NYSE: IFF) generated a revenue of over $2.5 billion, up from $1.3 billion during the same period last year, showing 83% growth. The EPS was recorded at $1.60, beating the market estimate of $1.53. In Q1, the personal care and fragrance sector made $426 million and $569 million, respectively. The IFF stock hit its all-time low in April 2020 due to the global market crash but has bounced back, gaining more than 41% year to date.
The Insider Monkey database shows that hedge funds are getting bullish on International Flavors & Fragrances Inc. (NYSE: IFF), as 55 funds have stakes in the company, up from 33 in the previous quarter.
Rhizome Partners, an investment management firm, has released its Q1 2021 investor letter and mentioned International Flavors & Fragrances Inc. (NYSE: IFF) and other stocks. Here is what the firm has to say:
“We are still getting used to the higher multiples that investors will pay for larger market cap and pure play companies such as IFF. We do understand the market’s rationale. IFF’s products account for a small percentage of the customers’ cost while playing critical roles in the products’ performance. With some operating leverage, the company can probably grow FCF at 4-6% a year. This brings the total return close to the long-term return of the S&P 500 index of 10%. Through trial and error, we have come to appreciate how scale, higher market share, route densities, switching costs, and collaborative relationships amongst major industry players can contribute to sustained high returns on invested capital.”
1. The Estée Lauder Companies Inc. (NYSE: EL)
Market Capitalization: $110.7 billion
Number of Hedge Fund Holders: 59
The Estée Lauder Companies Inc. (NYSE: EL) tops our list of the best beauty stocks to invest in. It is an American beauty company that manufactures skincare, haircare, and makeup products. The company also sells and manufactures fragrances and has operations in over 150 countries. The Estée Lauder Companies Inc. (NYSE: EL) is a parent company of some really popular brands, including Clinique, Bobby Brown Cosmetics, and La Mer.
In Q3 FY21, The Estée Lauder Companies Inc. (NYSE: EL) generated a revenue of $3.86 billion, showing a 16% growth year-over-year. The earnings per share for the quarter beat the market estimate of $1.32 and stood at $1.62. The skincare sector accounted for nearly $2.2 billion of the whole revenue and makeup generated sales worth $1.08 billion. The EL stock has gained more than 62% in the past year and 19.8% year to date. UBS Group has listed The Estée Lauder Companies Inc. (NYSE: EL) as a stock with strong pricing power during inflation. The company is also added to JPMorgan’s Analyst Focus List, projecting a profitable year.
Earlier in May, The Estée Lauder Companies Inc. (NYSE: EL) announced an increase in its ownership in DECIEM Beauty Group from 29% to 76%, worth over $1.0 billion. As of Q1 2021, we see that hedge funds are turning bullish on The Estée Lauder Companies Inc. (NYSE: EL) as 59 funds have a stake in the company, compared with 51 in the previous quarter.
Cooper Investments released its Q4 2020 investor letter and mentioned The Estée Lauder Companies Inc. (NYSE: EL) in it. Here is what the investment management firm has to say:
“Estee Lauder was sold because the business is experiencing a very significant share price appreciation in a short period. We bought this great company earlier in 2020, however Value Latencies appear exhausted – to highlight this point Estee Lauder now trades on 45x Free Cash Flow.”
You can also take a peek at 10 Best Consumer Finance Stocks To Buy Now and 10 Best Communication Equipment Stocks To Buy.
